It’s that time. The next couple of weeks of post will be tons of market data summarizing up the year in real estate in Salem Oregon. After looking at the data from the end of 2008, I called a 5-10% price correction for the Salem Oregon real estate market for 2009. Here’s where things are at.
Listed vs. sold homes.
I really like this particular graphic because it tells you the direction that inventory is headed. You can see that the inventory gap was already starting in 2006 and peaked in 2007 when there were just too many expensive homes and not enough buyers. The good news is that the gap has narrowed. The flattening of homes sold (the blue line) means buyers are feeling comfortable entering our local real estate market and buying homes. Don’t expect a jump up in those numbers any time soon with the unemployment woes of Oregon, but the fact that the number of homes listed and sold is getting closer together means inventory is going in the right direction, which is down. This is a good thing for the real estate market.
Salem Oregon Days on the Market (DOM)
This statistic is really important to some people so I’ll give it to you. The average for Salem Oregon for 2009 was 138. This is an increase from last year by 10.8%. This is not a surprise. Lending has been difficult and with the rule changes closings went from a typical 30 days to sometimes 60 days. Higher end homes are also taking a much longer time to sell which is pulling this number higher as well.
Overall, I don’t think is a particular concern in terms of the local market, but sellers just need to be prepared for a longer time frame in getting their homes sold.
Salem Oregon Home Prices
Okay, was my 5-10% price correction prediction correct? The average home price dropped 9.1% and the median home price dropped 9%. It was on the high end of my expectation, but I took lessons from Nostradamus and wrote in an ambiguous way so I can always claim that I was right. That’s what I tell myself anyway…
So yes, home prices dropped in 2009 over 2008. I would expect home prices to drop maybe another 5% in 2010 unless something happens where our unemployment rate increases dramatically. If unemployment does rise, more foreclosures would hit the market and cause further depression of prices. All appearances point to a stabilizing of the Salem Oregon real estate market and a possible bottom, but I really do want to see the market stand on its own without the tax credit before saying the market is done correcting. I’d also like to see what happens with the vote on measure 67 since that will impact small business owners and jobs.
What to expect for Salem Oregon real estate in 2010?
My personal opinion is that the market will remain kind of stagnant and slow for Salem Oregon. Home sellers will need to stage their homes and get them in good condition. Good online photos will be essential and sellers need to take care of home maintenance. The market will continue to be difficult, but not impossible.
P.S. All data used in this market report was crunched from the WVMLS.